Limitation bars demand on undisclosed foreign service

RND Softech, a 100% EOU providing transcription services, was subjected to a Service Tax demand under reverse charge on payments made to a US-based recording service provider during 2009-10 to 2011-12. 

The transactions were recorded in the books and payments made through banking channels. 

The extended period was therefore unavailable and the entire demand, interest and penalty were set aside. The Tribunal also followed the settled principle that once a demand is held time-barred, the merits should not be examined.